2018 (4) TMI 904 - AT - Central Excise

CENVAT credit - fake invoices - denial on the ground that the vehicle number mentioned in the invoices are not transport vehicle and the transporter of the vehicles denied the transportation of goods - Held that - no investigation was conducted from the drivers of the vehicle whether the goods have been transported to the factory premises of the appellant or not - proceedings against the appellant are not sustainable merely on the basis of the impugned investigation - Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Denial of Cenvat credit on invoices issued by a dealer
- Imposition of penalties due to alleged non-transportation of goods
- Dispute with the owner of the godown leading to sale of goods without invoices
- Adjudication of Cenvat credit by the authorities
- Appeal challenging the denial of Cenvat credit and penalties

Analysis:

The case involved the denial of Cenvat credit and imposition of penalties based on the allegation that the vehicle numbers mentioned in the invoices were not transport vehicles and that some transporters denied transporting the goods. The investigation revealed discrepancies, including the absence of physical stock in the dealer's godown and disputes with the godown owner leading to sales without invoices. The appellant claimed to have received goods for manufacturing final products, with payments made through account cheques. The adjudicating authority partially allowed Cenvat credit but also imposed duties, interest, and penalties. The matter went through multiple rounds of appeals and remands.

In the previous rounds of litigation, similar investigations led to different outcomes for other assesses, where Cenvat credit was allowed. The appellant argued that these precedents should apply to their case as well. The Revenue opposed, citing the repayment of duty by the appellant during the investigation and the alleged issues with the transportation vehicles as reasons for denying Cenvat credit.

After considering the submissions, the Tribunal found that the facts were not disputed by either side and were similar to previous cases where Cenvat credit was allowed. The Tribunal highlighted the lack of evidence regarding the transportation of goods to the appellant's premises and the use of fake number plates by transporters during the relevant period. Relying on precedents, the Tribunal held that the appellant had proven receipt and utilization of goods for manufacturing final products, thus entitling them to Cenvat credit. The Tribunal set aside the previous order and allowed the appeal with consequential relief.

In conclusion, the Tribunal's decision was based on the consistency of facts with previous cases where Cenvat credit was allowed, highlighting the burden of proof on the authorities to establish non-compliance. The judgment emphasized the need for concrete evidence to deny Cenvat credit and the importance of following established legal precedents in similar cases.